- 16 May 2022
- ICICIdirect Research
VINATI ORGANICS REPORTS STRONG GROWTH ON BACK OF HIGHER ATBS, BUTYL PHENOL SALES
VINATIORGA - 1932 Change: -7.95 (-0.41 %)News: Vinati Organics reported topline growth of 74% YoY to Rs. 486.1 crore against our estimates off Rs. 385.4 crore. We expect the growth should have been driven largely on account of better sales from ATBS segment along with butyl phenols, Rise in the input cost and delay in passing on entire inflation along with changes in the product mix towards butyl phenols have impacted gross margins for the quarter, which declined by 1310bps YoY to 46.1%. This dented OPM, which was down 680 bps YoY to 28.6%. However, the same witnessed an improvement on QoQ (+350bps) largely due to operating leverage. EBITDA was up by 40% YoY to Rs. 138.8 crore against our estimates of Rs. 106.4 crore. The bottom-line growth was aided by 43% YoY to Rs. 101.1 crore against our estimates of Rs. 82.7 crore
Views: Since key RM prices such as toluene, MTBE went up due to higher crude prices, we expect positive delta towards realisations should have come along with the volume growth for the quarter. Since ATBS has been witnessing strong growth along with decent performance from butyl phenols, one can expect this trend should continue from both of these segments in the coming year. Apart from this, integration with Veeral additives and thereby increasing presence into more anti-oxidants will likely to aid company performance in long run
Impact: Positive